2016 (12) TMI 1357 - AT - Income Tax

TCS demands - improper collection - Held that - There is hardly any dispute by now that the instant case is not that of non-collection of TCS but that of improper collection. The assessee has not only filed its all requisite details of TCS collected from its timber buyers, but also it has given all cogent reasons to have sold the timber in question after various discounts, rebates and settlements. We afforded ample opportunity to the Revenue to quote any specific material in the case file for the purpose of rebutting the above stated factual findings. There is no such material in all of assessee s paper-book which could pin-point any irregularity or infirmity in the above extracted lower appellate findings. It has further come on record that the assessee had collected Form No.27C in support of its TCS collection. The CIT(A) sought a remand report thereupon. The Assessing Officer did not comment any adverse material in his remand report dated 08.06.2012 forming part of the paper-book at pages 81 to 91. We thus uphold CIT(A) s common order under challenge in both the appeals.

Summary

Issues:
- Appeals against CIT(A)'s order for assessment years 2006-07 and 2007-08 under sections 206C(6A) and (7) of the Income-tax Act, 1961.
- Dispute over deletion of orders passed under section 206C(6) for both years.

Analysis:
1. The appeals pertained to the assessment years 2006-07 and 2007-08, challenging the CIT(A)'s order regarding the deletion of orders passed under section 206C(6) of the Income-tax Act. The Revenue contested the CIT(A)'s decision, alleging improper tax collection by the assessee, a timber trading company, following a survey by the department.

2. The CIT(A) reversed the Assessing Officer's actions after considering the remand report and the appellant's submissions. The appellant provided declarations in Form No.27C, reconciling sales figures and TCS amounts for the respective financial years. The CIT(A) found no adverse findings against the appellant, accepted the submissions, and directed the AO to delete the demands for both years based on the evidence presented.

3. The CIT(A) highlighted that the appellant had reconciled sales with TCS, provided confirmations from buyers, and demonstrated the receipt and genuineness of declarations, establishing compliance with TCS requirements. The CIT(A) also accepted the explanation for retail sales not liable for TCS. The appellant's meticulous documentation and explanations convinced the CIT(A) to allow the appeals and dismiss the Revenue's claims.

4. The Revenue's arguments to reinstate the TCS demands were refuted as no irregularities or infirmities were found in the appellant's compliance with TCS regulations. The absence of specific material to challenge the lower appellate findings, coupled with the submission of Form No.27C and the lack of adverse comments in the remand report, led to the upholding of the CIT(A)'s decision in both appeals.

5. Ultimately, the ITAT upheld the CIT(A)'s order, dismissing the Revenue's appeals. The judgment, delivered on December 20, 2016, in Ahmedabad, affirmed the deletion of the TCS demands for the assessment years in question based on the appellant's satisfactory compliance and documentation.